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How Does Debt Settlement Work?

Debt Settlement works by negotiating a payment for less than the balance owed (principal) on your unsecured personal debt accounts. This is different from simply reducing the interest rate as with Debt Consolidation and Credit Counseling, which do not affect the total debt balance.

By negotiating the balance, Debt Settlement provides a much faster means of handling your debt in San Jose. Most creditors are willing to accept payments of much less than the balance owed to close out an account rather than lose the entire amount in a bankruptcy proceeding.

New Era negotiators are experts at getting you some awesome deals in San Jose, but the offers don’t last forever. The most successful debt settlement clients in San Jose are ready and willing to respond immediately.

You can include the following types of debt in a New Era Debt Settlement Program:

Credit cards

Department store cards

Signature loans

Personal lines of credit

Old repossessions

Other unsecured debts

Old judgments

Private student loans in default

The following types of debt do not qualify:

Home mortgages

Federal student loans

Car loans

Other secured debts

Credit Union debts

Medical / Hospital bills

This list is not exhaustive. Be sure to check with your San Jose debt counselor.

Consider Your Options

Here is a brief description of each of those five debt relief methods.

1. Continue making minimum monthly payments.

If you can make minimum monthly payments, you may feel you’re doing the right thing by continuing that same path. But this just maybe your worst strategy.

2. Credit Counseling or Debt Management.

Credit counseling is a debt management program in which you make a single monthly payment to a credit counseling agency. In turn, that agency distributes the money to your creditors on your behalf, ideally at lower interest rates so you can pay off the debt faster. You still end up paying back 100% of your debt plus interest. These programs are designed to take 3 to 5 years and have very low completion rates in San Jose.

3. Debt Consolidation.

With debt consolidation, you take out a larger, low-interest loan and use that money to pay off your higher-interest unsecured loans. This leaves you making a single monthly payment that is – in theory – lower than what you were paying for all your credit card and other unsecured loans.

4. Debt Settlement or Debt Negotiation in San Jose.

Debt settlement differs from the first two options in that the actual principal balance you owe is negotiated downward. Because you end up owing less, debt settlement is generally a faster and less expensive debt relief option than either debt counseling or debt consolidation.

5. Bankruptcy.

For the individual who cannot meet his or her debt obligations, bankruptcy may be inevitable. A formal declaration of bankruptcy stops the creditor collection process, and the debtor no longer owes some or all the unsecured debt.

Figure Out Where You Stand

Do you have a legitimate financial hardship condition?

Most debt problems in San Jose are caused by loss of income, medical issues, or divorce / separation. These are legitimate financial hardships that can happen to anyone through no fault of their own, and any one of these situations can wreak havoc on a household budget.

Debt Settlement system is not a “free lunch” for people who don’t feel like paying their bills. If you are over your head due to a hardship circumstance, and you’d prefer to work things out with your creditors rather than declare bankruptcy in San Jose, then Debt Settlement can provide an honest and ethical debt relief alternative.

Are you committed to getting out from under your debt?

Debt Settlement is an aggressive approach to debt relief; and, as such, it presents an occasional challenge. Your level of commitment to staying the course, even when the road gets a little bumpy, often determines success. For those who are willing to see it through, debt settlement can get you through your financial difficulties faster and at a lower cost than any other debt relief option in San Jose.

Are your debts primarily from credit cards?

Most types of unsecured debt can be negotiated, including medical bills, lines of credit, signature loans, repossession deficiencies, financing contracts, department store cards, miscellaneous bills and more. The deepest discounts, however, are usually obtained with credit card debts; so, if most of your debt load is comprised of credit card debt, you can anticipate good results from the Debt Settlement strategy.

Can I Trust New Era?

You can pick the good guys from the bad guys by asking 14 important questions. It is always a good idea to check with the Better Business Bureau for the company’s rating and complaint history with consumers in San Jose. New Era Debt Solutions is rated an A+ with the Better Business Bureau.

New Era has been helping San Jose consumers become debt free since 1999. We’ve settled more than $200,000,000 in debt and worked with thousands of clients. But don’t take our word for it. Visit our Testimonials page to read or listen to our clients’ stories in their own words.

Here’s what makes New Era different:

No Upfront Fees. A Debt Settlement company should not charge you any fees unless or until they settle your debt. Period. This is not only the most ethical way to do business – per an FTC ruling effective October 27, 2010, it’s also the only legal way to charge fees.

No “add-on” fees. Some debt settlement companies try to get around the law by charging administrative fees, signing fees, consultation fees and various other excuses to get money from you. Good guy debt settlement companies such as New Era charge only a settlement fee, which you do not pay until your debt is settled.

End-to-end service. Some “debt settlement” companies you may talk with are only sales groups who will sell or pass your account off to a different company to handle your settlement. This means your financial data is being passed around and the sales person has no control over – or interest in – how your debt is settled. Look for a company such as New Era who will handle your program from beginning to end.

Experience. With the crash of the sub-prime mortgage industry in San Jose many new debt settlement companies headed by prior mortgage industry people suddenly popped up. These companies do not have nearly the experience or the relationships that lead to your best settlement deals. Look for companies who have been around long enough to amass a solid settlement track record. For example, New Era has been settling debts since 1999, and we’ve settled more than $200,000,000 in debt for our clients.

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Individual results may vary based on ability to save funds and completion of all program terms. Program does not assume or pay any debts, nor provide tax or legal advice. Consult with your professional advisors as necessary. Program not available in all states, please request, read and understand all program terms prior to enrollment.
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